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NIGERIA
N
WORLD RANK:
115
igeria, Africa’s most populous nation, has sought to improve
its macroeconomic stability and develop its poor infrastructure, but severe economic policy distortions and a lack of
transparency in the economic system continue to impair progress. The government also has struggled to end ongoing security threats in some parts of the country that have exacerbated
poverty and unemployment.
REGIONAL RANK:
16
The government’s overreliance on oil, which accounts for over
90 percent of export earnings, has exposed the economy to
major risks amid declining oil prices. Despite attempts to diversify Nigeria’s industries, overall progress has been only marginal.
State-imposed bans on imports have hurt consumers and businesses, and the judicial system remains vulnerable to corruption.
ECONOMIC FREEDOM STATUS:
MOSTLY UNFREE
ECONOMIC FREEDOM SCORE
57.1

( ▼ DOWN 0.4 POINT )
0
50
60
70
80
55.0
60.9
REGIONAL AVERAGE
WORLD AVERAGE
(SUB-SAHARAN AFRICA REGION)
NOTABLE SUCCESSES:
Government Spending
100
CONCERNS:
Rule of Law, Open Markets, and
Business Freedom
OVERALL SCORE CHANGE
SINCE 2013:
+2.0
QUICK FACTS
FREEDOM TREND
70
60
50
40
POPULATION:
178.7 million
UNEMPLOYMENT:
5.8%
GDP (PPP):
$1.1 trillion
2.7% growth in 2015
5-year compound
annual growth 4.7%
$6,108 per capita
INFLATION (CPI):
9.0%
FDI INFLOW:
$3.1 billion
PUBLIC DEBT:
11.5% of GDP
30
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2015 data unless otherwise noted. Data compiled as of September 2016
BACKGROUND: In May 2015, in Nigeria’s first peaceful transfer of power among parties since independence, former military ruler Muhammadu Buhari defeated incumbent President Goodluck Jonathan. Critical
challenges include an Islamist insurgency and budgetary shortfalls caused by plunging oil prices. Before
the May election, Nigeria, Chad, Niger, and Cameroon pushed the terrorist group Boko Haram out of its
major strongholds. However, Boko Haram attacks have continued, primarily in northeast Nigeria, and
militants in the oil-rich Niger Delta region have revived a campaign of attacks against the oil sector. In 2014,
Nigeria surpassed South Africa as Africa’s largest economy.
416
2017 Index of Economic Freedom
KEY:
WORLD AVERAGE
12 ECONOMIC FREEDOMS | NIGERIA
RULE OF LAW
152nd
GOVERNMENT SIZE
119th
182nd
100
100
80
80
70
70
60
60
50
50
0
35.3
33.2
12.2
Property
Rights
Judicial
Effectiveness
Government
Integrity
Protection of property rights is weak, although
the World Bank’s 2016 Doing Business survey reported
that fees for property transfers had been reduced. The
judiciary has some independence but is hobbled by
political interference, corruption, and a lack of funding.
Corruption is rarely investigated or prosecuted, and
impunity remains widespread at all levels of government. Protectionism driven by currency devaluation
has led to increased smuggling.
167th
29th
100
80
80
70
70
60
60
50
50
73.9
71.3
Business
Freedom
Labor
Freedom
Monetary
Freedom
95.2
87.2
Tax
Burden
Government
Spending
Fiscal
Health
0
161st
135th
106th
62.3
40.0
40.0
Trade
Freedom
Investment
Freedom
Financial
Freedom
Rank
Trade is moderately important to Nigeria’s economy; the value of exports and imports taken together
equals 31 percent of GDP. The average applied tariff
rate is 11.3 percent. In general, foreign and domestic
investors are treated equally, but the judicial and
regulatory systems impede foreign investment. The
banks are highly exposed to the energy sector, and
nonperforming loans have been increasing rapidly.
The Heritage Foundation | heritage.org/Index
NIGERIA
Despite recent reforms, the structural changes that
are needed to develop a more vibrant private sector
have not emerged, and the oil sector still dominates
overall economic activity. In the absence of dynamic
nonenergy growth, a more vibrant labor market has
not emerged. To tackle chronic shortages, the government cut gasoline subsidies in May 2016 by 67 percent.
Nigeria regulates prices on electricity.
85.2
Rank
OPEN MARKETS
142nd
48.9
63rd
The top individual income tax rate is 24 percent,
and the top corporate tax rate is 30 percent. Other
taxes include a value-added tax and a capital gains
tax. The overall tax burden equals 2.8 percent of total
domestic income. Government spending has amounted
to 12.6 percent of total output (GDP) over the past
three years, and budget deficits have averaged 2.8
percent of GDP. Public debt is equivalent to 11.5
percent of GDP.
100
0
1st

REGULATORY EFFICIENCY
0
50th
417